Lundberg Corporation\'s most recent balance sheet and income statement appear be

Question

Lundberg Corporation's most recent balance sheet and income statement appear below:

Dividends on common stock during Year 2 totaled $30 thousand. The market price of common stock at the end of Year 2 was $9.37 per share.

Compute the gross margin percentage for Year 2. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Compute the earnings per share (of common stock) for Year 2.(Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Compute the price-earnings ratio for Year 2. (Do not round intermediate calculations. Round your answer to 1 decimal place.)

Compute the dividend payout ratio for Year 2. (Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Lundberg Corporation's most recent balance sheet and income statement appear below:

Explanation / Answer

Lundberg Corporation a Gross Margin Percentage for year 2 Gross Margin = (Sales - Cost of goods sold)/ Sales = (1,340 - 851) /1,340 = 489 / 1,340 = 36.5% b Earnings per share (of common stock) for year 2 Earnings per share (EPS)   = (Net Income - preferred dividend)/ Average number of shares of common stock outstanding = ( $120 - $21)/(100 shares+100 shares)/2 = $ 99/100 = $       0.99 c Price Earning rato for year 2 Price earning ratio = Market price per share / Earning per share = 9.37 /0.99 =           9.46 d Dividend pay out ratio for year 2 Dividend payout ratio = Dividend per share / Earnings per share = $ 0.30 / $ 0.99 = 30.30% Working Note: Dividend per share = Common dividend / common shares = $ 30 / 100 shares = $ 0.30 per share

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